Goodwill Industries of San Francisco, San Mateo and Marin Counties faces a daunting challenge: There has been a 25 percent increase in demand for services while its operating deficit climbed to $3 million. Deborah Alvarez-Rodriguez, the president and CEO, turned off enough lights and made sufficient labor adjustments to cut the deficit to $1 million, but that remains a staggering amount for a nonprofit agency with a mission to help disenfranchised people find their way and get jobs.

So, for the first time in its 93-year history, Goodwill Industries is undertaking a $1 million emergency fundraising campaign, at a time when people who have long helped or would like to help have fewer resources themselves. Meanwhile, people who already face significant barriers to jobs are struggling all the more in the recession.

Alvarez-Rodriguez, 48, is undaunted. Failure to reach the $1 million goal before a June 30 deadline, would mean the agency would have to eliminate services. That, she said, is not an option.

Reared in New York and a graduate of Harvard-Radcliffe College, Alvarez-Rodriguez has 15 years of executive management experience with nonprofit and philanthropic groups in the public and private sectors. Prior to taking her post at Goodwill in 2004, she was vice president of Silicon Valley's Omidyar Network, a philanthropic investment firm established by the founder of eBay, Pierre Omidyar, and his wife, Pam. Alvarez-Rodriguez was also director of the San Francisco Department of Children, Youth and Their Families, where she developed an early childhood education and care system.

Founded in 1916, Goodwill Industries of San Francisco, San Mateo and Marin Counties seeks to reduce poverty by preparing people for jobs and environmental stewardship. It has 17 retail stores, an online store and a reuse/recycling operation as well as job counseling, training and placement programs.

This interview has been edited for length and clarity.

Q:We know you have an extensive retail operation, but the public doesn't know as much about your job-training activities, so we want to hear about that. Tell us how Goodwill Industries works.

A: We have 17 stores, 30 donation collection sites and then job training operations in all three counties, which are San Francisco, San Mateo and Marin counties. Our retail operations generate - and that's both our stores and salvage businesses - close to 85 percent of our revenue, which is close to $32 million.

However, we are presently working our way out of a $3 million deficit. We're ahead of our plan on our stores, but foundation dollars and individual contributions and other types of financial support combined with an astronomical increase in demand for services has created a perfect storm. I tell people Goodwill is the canary in the mine. We started seeing this eight or nine months ago. We started seeing demand for services increasing about 25 percent.

The challenge for Goodwill is that retail sales are directly tied to material donations, what people donate to us. And those are softening, so as material donations go down, as people are holding onto their stuff, then we don't have the product to sell. And those products and those sales directly go into supporting both our job training programs and classes.

Q:What is the way out of this morass?

A: Well, I think they're trying to do what they can in Washington. We are trying to do a couple of things at Goodwill. I'll tell you what we're firmly committed to, which is that everybody who comes through our doors in need of help, we want to provide help. The way out is not cutting services.

We are facing a $3 million deficit. We have already gone through operating cuts in payroll, we're looking at everything from furloughs, not filling open positions, making sure every single light bulb is turned off, every possibility for cutting costs. And we've actually been able to strip out $2 million of the deficit, so we're down to about a $1 million deficit right now.

We have to figure out a way to aggressively reach out to individual financial donors. We're pushing sales as much as we can. And we run a very lean operation, so we don't have much slack. For us, 87 percent of every dollar that we make goes directly to support programs.

We don't have a lot of fluff in margin. We want to reach out to every customer, every shopper, every donor, every business partner we have. They are part of this community that we have been a part of for 93 years. So we're going to reach out to every single one of our friends and family and ask them for whatever - $5, $10, $100, $599, $1,000 - whatever you can afford.

Q:Can you talk a little bit about the feedback you're getting from the usually reliable donors who now are saying they just can't give? What's the tone, what are they worried about, what has changed for them?

A: The feedback we're getting from our donors is the same we're seeing in the American public in general, which is a high sense of uncertainty. People are saying, "I didn't get my bonus this year. My spouse was laid off. I feel too uncertain what's going to happen next week or next month and whether or not I'll have the resources to give."

Q:There's a term in the advertising industry about breaking through the clutter, to get noticed and increase your relevance. Given there is competition for nonprofit dollars, how does Goodwill distinguish itself so that people will want to give?

A: There are a few things. The first is that I pride myself that Goodwill runs a very, very lean and effective business operation. We make sure that every possible dollar goes directly into services. I think the public is demanding a level of accountability that we can actually meet, and we can demonstrate how our dollars are being spent.

The second thing is that we're not a new or emerging or flashy nonprofit. We've been here for 93 years, creating jobs, providing job-training services and other opportunities in the neighborhoods and communities.

And the last one is that we have always been about jobs. It's been about job training and the transformative power of work. And we've always been about giving people the tools to succeed for themselves, as opposed relying on charity.

Q:Tell us about your job-training activities.

A: We have about 11 or 12 different programs that are job-training programs at Goodwill. Many people know about the transportation academy where we teach people overcoming very significant barriers to employment how to get their Class A license, their big-rig truck license. But we're also teaching anything related to the transportation industry - GPS systems, shipping and delivery, all those kinds of things.

We also have a very extensive computer-skills training that starts with basics up to training certification, for being a computer systems operator and support person, so that you can actually run a help desk. The difference is help desk people are earning $15 to $20 an hour and people who can do basic typing are earning $10 an hour. We want to give in each one of our training models pathways to opportunity and to careers.

We also do extensive retail sales and service. And it starts from the basic fundamentals of customer service and how do you become a sales clerk, to the really good-paying jobs in retail, which are how do you become a manager in a retail environment, a buyer. We have classes in all of these arenas for people. So again, there's a pathway to opportunity.

And we do the basics. We do English as a second language. We do GED, we do skills: how to show up for work, how to write a resume, how to interview successfully. So, it's soup to nuts.

Q:In the past year, how many people did you anticipate for classes and how many enrolled?

A: Well that number is changing radically as the economy has been shifting. Four years ago, Goodwill served 700 participants on an annual basis. We call our students participants because we believe that they're responsible for their own success.

This year, we project 2,000 will come in. So we've tripled the capacity in four years' time. But I can't even predict at this point how many people are going to come to Goodwill by the end of this fiscal year. But it will be well in excess of the 2,000 that we budgeted for.

Q:What's the DNA of someone who's going to be successful in a Goodwill program?

A: Goodwill has really focused on serving the hardest to serve. Close to 55 percent of the people who are coming to Goodwill for job training have in some way been incarcerated or interfaced with the criminal justice system and have a felony conviction. Another - and they're overlapping numbers - 55 percent have been on long-term welfare dependency, in which they are actually terming out of their welfare benefits. So these are individuals who could not successfully transition off of welfare through the other programs and they're coming to us. We actually run the largest welfare-to-work program in San Francisco now.

Another 25 percent have been homeless in the last three months. About 20 to 25 percent have some kind of significant and severe disability. And then in addition to that, there are all the other issues - substance abuse, intergenerational poverty. A very large percentage of our folks have no high school diploma. So that's who's coming to Goodwill. As well as displaced workers, and even some incumbent workers that are trying to change their skills.

The person who is really successful is the person who is willing to take a really good look at himself or herself and say, "I can imagine an alternative future for myself."

Q:You mentioned the makeup of the participants and it sounds like some of what you might expect, people who have had some troubles. Are you seeing that change at all? Is there an influx of more traditional office workers or others as people lose jobs?

A: Absolutely. As more people are losing their jobs and the port of entry into Goodwill is widening, we are seeing that. We are seeing more displaced workers, we're seeing people recently unemployed, people who are just saying, "Oh my goodness, that entire occupation has disappeared, has either been offshored or disappeared, and I need to retool myself." The demand for our trucking academy is growing. A graduate with a Class A license can earn $20 to $25 or $40 to $45 an hour, depending on the rig they are driving and the distance they are driving.

We are getting computer technicians and bankers who want to get into our trucking academy.

Q:It's not an easy job you have. Is this some of the most rewarding work you've done, personally?

A: Absolutely. I love my work at Goodwill. I'm the mother of a 6-year-old and every day I get to go home to my daughter, Sonia, and I get to go home with a sense of pride and accomplishment and a sense that I'm helping to give her a better future. And there's nothing more rewarding than that.

When I get to work I get to have ex-felons, formally homeless people, ex-drug addicts become my mentors. And they teach me new skills, and they teach me new insights and they teach me how to be a better person every single day. There's no better job than that.